The Seattle-based company also agreed to halve the amount of fish waste it annually discharges into Resurrection Bay, from 10 million pounds to 5 million.

Icicle's problems surfaced in 1999 when dive surveys, an EPA inspection and the company's own reports revealed that an underwater pile of fish waste exceeded the legal size limit, said Robert Grandinetti, an EPA compliance officer. Instead of being an acre or less, the pile measured about 1.4 acres, he said.

Violations also included fish waste not being properly ground up, and foam, oily waste and sludge seen floating on the water, Grandinetti said.

National pollution discharge permits say pieces of waste must be no larger than half an inch in diameter. Fish processors are also not allowed to leave residue, such as foam or sludge, floating in marine waters.

To correct the problems, Icicle has invested $75,000 to extend its waste outfall pipe into deeper water where there's greater flushing, said Terry Leitzell, Icicle's general counsel. The company also has spent several thousand dollars to upgrade its fishmeal plant, he said, which converts wet fish waste into a dry product that can be used as plant fertilizer or fish food.